marketing agroforestry products - the center for agroforestry · •fruits (persimmon, paw paw)...
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Agroforestry
• Sustainable agriculture
• Environmental benefits
• Habitat for wildlife
• New market opportunities
• Diversified farm income
In this presentation
• Provide a framework on how to approach the marketing of agroforestry products and overcome some of the challenges associated with it.
– Market research
– Marketing strategies
Agroforestry Products
Edibles
• Mushrooms (shiitake, truffles)
• Nuts (chestnuts, pecans, black walnuts, hickories, hazelnuts)
• Fruits (persimmon, paw paw)
• Berries (elderberry, aronia)
Herbal medicinals
• Ginseng
• Goldenseal
• Which hazel
• Elderberry
Specialty wood products
• Diamond willow canes
• Red cedar closet liners
• Walnut gunstock guns
Floral and greenery
• Willow
• Ferns
• Salal
Recreation
• Fee hunting
• Agritourism
Black Box
• How do I get into the market?• What are my costs ?• Wholesale and retail prices• Where can I buy what I need for my business
and for what price?• Is the supply I need readily available?• Who are my customers? What do they want?• For how much can I sell my products? • Who are my competitors? What are they doing?• What can I do different?
Market research
Secondary information sources
• Published reports and studies
• Online information• Journals and magazines• Business directories
Primary information sources
• Personal interviews• Observations• Surveys• Focus groups
SWOT ANALYSIS
StrengthsPrevious farming experience
Available land
Children returning to the farm
Location – close to a big city
WeaknessesModerate finances
Seasonal and perishable product
Lack of marketing skills
OpportunitiesNew cultivars made available
Elderberry co-op
Increased interest in locally produced products
ThreatsCompetition from imports
Increased federal and state regulations
Extreme climate events
SWOT
Example - farmer who would like to start growing elderberry
5 Forces ExampleShiitake Mushrooms
IndustryTHREAT OF NEW ENTRANTS
• The cost to establish a business is not high•Production and marketing knowledge need to be acquired through experience •Incumbent firms create reputation through quality, customer service, consistent supply
COMPETITION•From shiitake produced on sawdust and imports
SUPPLIERS•Limited number of spawn suppliers•Good relationship between suppliers and producers
SUBSTITUTES• White button mushrooms and portabella mushrooms for lower price and higher availability•Oyster mushrooms – same price and availability•Chanterelle, maitake, morels, porcini – higher price, lower availability
BUYERS•Local market•Gourmet restaurants, farmers markets, on farm•High prices
Next steps
• Decide on what products to produce
• Identify who want our product and under what conditions will they buy it (target market)
• Formulate marketing strategies to meet the needs of the target market
Target market(s)
• Market segments
• Target market
• Demographic characteristics (age, sex, religion, education, income)
• Geographic location (counties, states, regions)
• Psychographic characteristics (lifestyle, behavior, values, attitudes)
Market segments
• Example:Product: Elderberry jellyCustomer segments: 1. Online customersGeographic: Nationwide (USA)Demographic: Younger, moderate to high household income, high level of educationPsychographic: Price sensitiveNeeds/Preferences: Like the comfort of shopping from home2. Health food stores customersGeographic: Regional areaDemographic: Older, higher household income, high level of educationPsychographic: Health conscious, less price sensitiveNeeds/Preferences: Prefer healthy, high quality products
Customer profile:Who are they?Where are they?What do they need?How do they buy?How large is the segment?
Marketing strategies
Adding Value • Processing
– Extend availability and shelf life– Potentially higher returns– Use lower quality products– Diversify market outlets– Higher investment– Financial resources and human resources/expertise
• Extra convenience• Customer service• Product image (healthy, environmental friendly,
locally produced, organic)
Marketing strategies
• Distribution Strategy - getting the products to the buyer
• Direct marketing– Outlets: farms, farmers markets, PYO, CSA,
Internet
» Capture larger share of consumer’s spending
» Closer relationship with the consumer
» Higher risk
Marketing strategies
• Distribution Strategy - getting the products to the buyer
• Intermediary distribution – Wholesalers, distributors, cooperatives,
retailers
» Provide constant dependable supply
» Maintain product integrity along the value chain
» Reduced risk
Marketing strategies
• Pricing Strategy– Pricing to the market
• What others are charging for the same type of products
• Power to set prices (differentiation, reputation, promotion)
• Demand sensitivity to price changes
– Pricing to your costs• Cover expenses
• Make a profit
Marketing strategies
• Communication Strategy
– Message: freshness, local, sustainably produced, healthy
– Tools: adds, flyers, press release, tasting samples
Marketing strategies
• Communication Strategy
– Delivery: festivals, local radio, word of mouth, social media
– Frequency
– Costs
Marketing plan
Structure of a Marketing Plan
• Introduction • Market research and analysis• Marketing and financial objectives and goals• Marketing strategies
– Product – Price– Distribution plans – Communication
• Marketing budget - estimated costs of the planned marketing strategies, the cost associated with market analysis and an explanation of the source of funds (e.g., borrowed, savings, percent of revenue).
Conclusion – The Framework
• Goals/objectives• Site assessment• List of potential “Best bets”• Market research
– Collection of information– SWOT Analysis– Porter Five Forces Model
• Refine “Best Bets”• Marketing planning
– Identify target market – Formulate marketing strategies (product,
distribution, price, communication)– Finalize marketing plan
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